Plains' Cactus II to Start Commercial Service Next Week

HOUSTON (P&GJ) — Plains All-American's new Cactus II crude oil pipeline from the Permian Basin to the Gulf Coast is mechanically complete and will begin commercial service next week, CEO Willie Chiang said.

Plains All American's Cactus II pipeyard (photo: Plains)

The 670,000-bpd Cactus II is one of three new crude oil pipelines scheduled to enter service before the end of the year, easing bottlenecks that developed as fast-rising Permian Basin production exceeded pipeline takeaway capacity from the region more than a year ago.

"As of today, the line is approximately 50% filled with crude, and we anticipate entering initial commercial service sometime next week," Chiang said during a conference call with investors to discuss the company's second-quarter financial results. "We expect to have direct Cactus II connectivity to Corpus (Christi) in service by the end of the first quarter 2020."

Other Permian-to-Texas Gulf Coast crude oil pipelines scheduled for completion this year include the 550,000-bpd EPIC Crude Oil Pipeline from Orla, Texas, to Corpus Christi and the 900,000-bpd Phillips 66 Gray Oak Pipeline, spanning 850 miles to destinations in the Corpus Christi, Sweeny and Freeport markets.

Chiang also said Plains has added new investors to its proposed Wink-to-Webster pipeline and expects to start operations on the project in the first quarter of 2021. In addition to original venture partners Exxon Mobil and Lotus Midstream, Chiang said Plains has also added MPLX, Delek and Rattler Midstream to the group of project investors.  Plains holds 16% of the venture.

Houston-based Plains beat analyst projections with sharply higher net income of $446 million in the second quarter of 2019, up from $100 million in the same quarter of 2018.  It attributed the improvement, in part, to comparatively higher Permian Basin volumes and pricing in the U.S. and Canada.


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